There a few things more confounding to mobile service providers in hotly contested markets than missing out on opportunities to generate more revenues and profits from what have been lightly used services. This is particularly the case in the United States where unlike much of the world where prepaid services are the norm, it is estimated that roughly 19 percent of U.S. subscribers avail themselves of these services.
That said, and despite some cultural and addressable market challenges, U.S. mobile services providers can change the game in their favor as prepaid is already experiencing significant growth due to a variety of factors, and if done correctly is poised according to research firm Yankee Group is to grow over the next few years faster than the overall telecommunications.Source: Yankee Group North America Mobile Forecast, December 2012
As Barbara Sampson, Senior Market Manager, Policy & Charging (P&C) Marketing, Alcatel-Lucent highlighted in a recent TechZine posting, Make the most of prepaid mobile plan growth, based on extensive research by Alcatel-Lucent found that prepaid suffers from:
To help U.S. operators fulfill and hopefully exceed the forecasts, SurePay® is Alcatel-Lucent’s solution that ensures there is a prepaid charging system in place that is flexible, scalable, and exceeds service provider and their customers’ expectations.
This is part of a series of postings (see below) relating to what options SurePay provides that U.S. mobile service providers can employ to maximize the prepaid opportunities. However, as a introduction to the detail in those postings it is instructive to look at what SurePay is and does.
Prepaid market realities and the role of SurePay
What research has confirmed is that mobile subscribers want to build their own price plans based on their demographics and usage behavior. Subscribers want to control all elements within a “custom” package, such as fixed minute increments, SMS, and data volumes. They are also demanding control over what applications they subscribe to and how much they pay. Legacy charging infrastructures are limited. However, with SurePay, operators can create and deploy marketing, user, and operation interfaces that define and modify price plans and promotions. It effectively guides and supports operators as they create, provision, and update SurePay tariff data, including bundles, tariff plans, and discounts.
Additionally, SurePay lets operators:
With SurePay, mobile operators can simultaneously offer a variety of charging options for a wide range of content types. And, SurePay’s flexibility and scalability for prepaid payment support can also be effectively expanded to real-time postpaid customers.
SurePay allows unified management of prepaid and postpaid subscribers with one system that handles convergent rating and charging. This also includes hybrid systems, which are defined as a combination of both prepaid and postpaid services over a single device. For example, it can accommodate a single handset where business calls are on a postpaid plan and personal calls are on a prepaid plan.
By supporting multiple payment modes across a single converged charging and rating engine, there is no need for separate rate support infrastructures. This results in reduced operational, service delivery, integration, and maintenance costs. SurePay also configures new tariff plans only once for both prepaid and postpaid subscribers.
A big benefit here is that SurePay supports shared data plans for consumer and enterprise subscribers. This lets multiple devices share a pool of data allowances and stimulates mobile data usage, thereby expanding the operator’s target base beyond prepaid customers.
Source: Alcatel-Lucent
SurePay’s high reliability, flexibility, and scalability encourage innovation. Faster setup of new prepaid mobile business plans and models help meet changing customer requirements and new market trends/drivers. SurePay service bundles and packages can also help mobile operators control costs, ensure customer stickiness, and generate additional revenues.
An example of this is SurePay’s Tariff Admin Tool. This service bundle provides marketing and operations interfaces to define and modify price plans and promotions, as well as test and verify a tariff plan offline prior to market rollout. It also provides the user interface to easily define and modify price plans and promotions. And it guides and supports mobile operators in the quick creation and provisioning of SurePay tariff data, including bundles, tariff plans, and discounts.
Finally, as with all prepaid plans, the customer knows how much they are paying and how close they are to reaching their limits. For those trying to watch carefully the amount of discretionary income they can allocate to mobile services, which for most households have become the real-time platform of choice for interacting, this is a real differentiated value, particularly for parental controls in limiting the use of children.
In short, prepaid is not just become an option, but its attraction can be enhanced if service providers have a platform that gives the customer several options that fit their unique requirements. After all, one size does not fit all, and customer choice translates into customer satisfaction and loyalty.
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But there are some options mobile carriers might want to consider to help keep their subscribers’ data plan bills more manageable, and keep their customers happier. One way to allow for that is by introducing sponsored data charging programs.
Sponsored data charging programs are an effective way mobile carriers can help their subscribers justify the cost of connectivity, while growing their own user bases and expanding their ecosystems to include more application providers and marketers. That’s the word from Barbara Sampson, senior marketing manager for policy and charging PLM marketing, and Thomas King, manager of the policy and charging portfolio, at Alcatel-Lucent. The two wrote a recent TechZine posting, Operators benefit from sponsored data charging, that details how mobile operators can prosper with these types of programs.
Such programs, Alcatel-Lucent calls them Smart Plans, enable mobile subscribers to enjoy connectivity without being charged for it on their monthly plan.
There are various models of sponsored data charging. The zero rating model, for example, has an application provider or other third-party pay for subscriber data consumed by the specific app or service. A second example would involve a marketer providing a subscriber with a data reward for making a mobile purchase or trying a new service.
However, introducing these kinds of new options involves a bit of work on the billing front. That’s why Alcatel-Lucent and Aquto have joined forces to address sponsored data charging. The partnership involves Aquto leveraging Alcatel-Lucent’s SurePay platform with its own monetization platform to enable mobile carriers to support sponsored data models.
Aquto offers both cloud-based sponsorships to enable data rewards and zero rating, and a service provider user-engagement application option, which provides a destination at which subscribers can discover apps and services and get advertiser offers for data rewards and/or zero rating.
A huge benefit here is that operators can build service plans that give customers visibility over all of the devices that us data plans which enable them keep track of usage and let them top off their accounts wherever they may be. Mobile service providers can thus not only obtain news revenues from sponsors but are positioned to provide customers a more compelling and understandable user experience.
]]>New Service Provider Revenue Monetization Model
Just as LTE has evolved to be the predominant technology for mobile broadband providers -- generating an average data volume per user of 168% higher than 3G data – so must the traditional charging model change. One charging model growing in popularity is Sponsored Data Charging.
Sponsored Data Charging enables mobile subscribers to view, stream, and benefit from sponsored content and use applications over the mobile service provider’s network without that data usage coming out of their monthly plan. The data charges that a subscriber would pay for the sponsored content are paid instead by the third-party provider owning the content. Even more importantly, a subscriber can test out certain sponsored applications and features for a short time to determine whether to subscribe, without impacting monthly data-plan limits.
Not only is Sponsored Data Charging built for massive broadband usage from all kinds of connected devices, it also can support emerging technologies such as VoLTE and NFV. Key target industries include advertising, retail, media, entertainment, healthcare, and financial services.
How Does Sponsored Data Charging Work?
Sponsored Data Charging requires flexible charging and rating models. One example is zero rating, where an application provider or third party pays for subscriber data consumed by the specific application or service, as well as data rewards, where the users are rewarded with additional buckets of data to extend their data plans.
For example, a mobile app developer could pay the mobile service provider a negotiated rate so the subscriber can use the app without worrying about data usage and overages. Zero rating data supported by advertising is a variation of this type of data plan. Another example is where a marketer provides a customer with a data reward as a bonus for making a mobile purchase, trying out their service, or for lead generation. Depending on the use cases with third parties, the real-time charging system needs to ensure accurate charges to the sponsor rather than to subscriber accounts.
Sponsored Data Monetization Partner Ecosystem
Sponsored data programs are proving to be an effective method of both monetizing mobile data consumption and attracting new subscribers on a global basis. To take advantage of this growing opportunity, Alcatel-Lucent is collaborating with Aquto. The collaboration takes advantage of Aquto’s deep understanding of the digital marketing ecosystem and combines with Alcatel-Lucent’s policy and charging expertise and experience.
Using the Alcatel-Lucent SurePay® platform, Aquto enables mobile service providers to rapidly roll out data sponsorship programs including data rewards and zero-rating of mobile apps/content. As shown in the diagram below, the service integrates with the existing IT infrastructure and with minimal investment, enables the service provider to monetize almost immediately by leveraging a global network of sponsors, which includes app publishers/developers, advertisers, and marketers.
Diagram: Sponsored Data Monetization Platform [Source: Aquto]
Aquto offers two programs for mobile service providers: Cloud-based sponsorships and the service provider user-engagement application.
Cloud-based sponsorships: To enable zero rating of mobile content, or offer data rewards to users, app publishers/developers, advertisers and marketers can leverage easy to integrate capabilities to keep users connected with their content and services.
Service Provider user-engagement application: In an increasingly competitive market, service providers have to devise new ways to keep users engaged. It is a destination to discover apps and services, offers from advertisers through which users can experience the benefits of zero rating and data rewards. The app draws users in and provides operators with the opportunity to engage users in a positive setting.
This sponsored data concept is not just about free Internet. It is quickly presenting itself as a vast opportunity for service providers to tap into a growing mobile ecosystem that is made up of app marketers and advertisers. Users are now spending more time with their mobile devices than in front of the TV or desktop. The timing is right for service providers to engage.
The combined expertise of Aquto and Alcatel-Lucent – including experience working with mobile operators -- has let leading mobile service providers rapidly roll out this new service that allows new revenue and monetization streams.
Orange France is doing it right when it comes to 4G LTE, and has deployed it extensively with 70 percent of the French population now having access. The operator deployed LTE in different bands and both TDD and FDD modes plus CA to improve capacity and coverage while also simplifying things with a self-organized network, according to a recent TechZine blog post, 4G LTE destinations for the connected traveler, by David Swift, Marketing Director, Alcatel Lucent.
Spain too has robust 4G LTE deployment as Telefonica Spain is leveraging LTE’s speed and reliability for next-generation multimedia services in the hotly contested Spanish mobile market. LTE has given Telefonica an early edge. 4G LTE overlay was the operator’s approach. Users can take advantage of its speeds without Telefonica having to skimp on its 2G/3G infrastructure. In addition, as Swift points out, Telefonica Spain is ready for their network’s evolution to vRAN and LTE Advanced, according to Alcatel-Lucent.
Let us not forget China, the biggest and fastest growing mobile market in the world. China Mobile invested $7 billion in its network in 2014, and is deploying a TD-LTE HetNet and adding metro cells to address hotspot issues. In fact, China Mobile now claims it has the world’s biggest end-to-end TD-LTE HetNet, and it has established an LTE TDD ecosystem and is ready for network functions virtualization (NFV) and cloud-based services.
In the Middle East, Dubai has become a 4G LTE leader. Etisalat, a mobile provider in Dubai, covers 85 percent of populated areas and has also addressed the issue of massive smartphone penetration and demand for massive capacity. They use carrier aggregation (CA) to maximize spectrum and boost capacity and speed. According to Alcatel-Lucent, their network claims mobile broadband speeds up to 300Mbps.
And then there is the U.S. In the U.S., AT&T also is utilizing CA effectively. With a user based of around 300 million, AT&T has to handle both volume and customers who expect a superior quality of experience. To achieve this, AT&T has deployed LTE backed up by CA—and it also uses small cells to boost LTE coverage in dense, high-traffic environments.
Laos telecoms could learn a thing or two from these mobile operators, and as Alcatel-Lucent highlights, it could use their LTE Express solutions to deploy 4G LTE quickly.
]]>Self-service to one degree or another has been present since the rise of the web. However, customers are increasingly choosing self-service because they feel more empowered and it is often perceived to be an easier interaction than dealing with a live person. The rise of the smartphone also has increased the use of self-service.
In fact, as explained by Jessica Verbruggen, Integrated Marketing Assistant at Alcatel-Lucent Motive, in a recent TechZine article, Empowering Autonomous Customer Self-Care, self-service can be a win-win for customers and communications service providers (CSPs).
The voice of the customer supports self-service
Verbruggen, citing a recent consumer survey by Nuance Enterprise to illustrate here point. The survey found:
Plus, in terms of what motivates them to use a mobile app:
Benefits to CSPs
As noted, CSPs are finding self-service to be very beneficial. Experience has already proven that customer self-care reduces the cost of interaction with customers, allows them to collect more customer information and helps them deliver a more personalized experience.
“This, in turn, drives higher customer retention, increases revenues, and positions their brand as being a provider of a comprehensive and personalized customer experience,” Verbruggen noted.
One problem that many CSPs have, however, is easily delivering all the functionality that consumers expect and appreciate. That’s why products such as Alcatel-Lucent’s Motive’s Self-Service Console, part of the company’s Motive customer experience solution, are so well-received.
The Motive Self-Service Console empowers customers to pay their bills, access their accounts and schedule maintenance without having to involve a live agent. A large European operator that uses the tool has reported that 88 percent of customers that used the Motive troubleshooting application were able to avoid a call to the help desk entirely.
That’s huge. And it demonstrates strongly why CSPs are increasingly attracted to customer self-care.
“CSPs are able to cut costs, get a better view of their customers, and provide more personalized service,” explained Verbruggen. “That’s a win-win if I’ve ever seen one.”
]]>A recent U.S. survey by Alcatel-Lucent Motive found that 71% of smartphones had no security protection to defend against malware. That’s a sobering stat considering the 20% rate at which mobile malware is increasing annually. The malicious activity can degrade smartphone performance, secretly pirates your data minutes, and steal personal information from you, spy on your whereabouts and track your browsing calls, texts, emails and web browsing.
Now here’s where the survey gets even more interesting: It reveals 65% of mobile subscribers think it’s the service provider’s responsibility to protect their smartphones. And the majority is willing to pay their service provider for this mobile service – up to $4.40 per month!
For operators continually on the hunt for new revenue generating services and “sticky” offers that attract and retain subscribers, device security services is a lucrative and differentiating opportunity right under their nose.
Operators already have a trusted billing relationship with customers. So who is more uniquely positioned to protect customers’ connections and content than the service provider? By defending customers’ devices against malware, operators are protecting their own networks, strengthening their relationship with customers and ensuring subscribers have a high quality service experience.
Opportunity Knocks
Motive Security Labs (formerly Kindsight Security Labs) conservatively estimates that 15 million mobile devices are infected with malware at any one time. And with LTE and VoLTE devices flooding today’s market, subscribers are spending increasingly more time browsing the Web, accessing data and consuming video. As a consequence of being more active on the Internet, subscriber devices will be at greater risk of infection, which can cause unwanted traffic over an operator’s network.
Service providers are wise to take the steps necessary to prevent infections that can also sour the customer service experience and potentially slow network performance. To do this, service providers need a cloud-based, network-driven security solution that can be rapidly deployed and scaled. Because it resides on the network, the security service is always-on and up-to-date and can pinpoint malware on subscriber devices without having to be installed on them.
Alcatel-Lucent’s newly announced Motive Security Guardian fits that description: operators gain real-time insight into what subscribers and devices most affected by malware and the most common types of malware to better contain and block threats. It also enables operators to better understand how malware impacts their network resources and performance to arrive at strategies for improved efficiency and service delivery optimization. And by correlating malicious activity on the network to infected subscriber devices, it enables operators to proactively alert subscribers and provide step-by step instructions on how to remove the threat.
Seize the Opportunity (Before your competitor does)
Device security is an ideal path to service provider differentiation, new revenue and subscriber loyalty. Here’s proof:
While the Internet and all of the technologies that have stemmed from its creation have served to make our lives easier in many ways, they can also be very confusing and frustrating at times. In these times, people have traditionally turned to call centers to get customer support. In today’s increasingly digitized world though, fewer people are relying on this form of assisted service. Contacting a call center tends to be time consuming and, often times, frustrating. Traditional customer support is not very well-suited to handling the millions of very specific questions that arise during device usage every day. Enter mobile self-service.
There are few areas of our economy today that haven't been touched by the growing self-service industry. Many, it seems, prefer to resolve their issues themselves. People relish the ability to “do it themselves” because it affords them a certain level of control over their devices and services that was previously not attainable.
A recent consumer survey commissioned by Nuance Enterprise found that a majority of respondents thought positively about self-service. More specifically, 72% of smartphone users surveyed said that they have a more positive view of a company if they have a mobile self-care app, and 81% will tell others about a positive app experience. In terms of what motivates them to use a mobile app, 35% said that effortless transition to a live agent from a mobile app is the feature most likely to drive usage, while 48% want more functionality.
It’s not just customers who are embracing self-service though. Many CSPs are hopping on the bandwagon and offering web-based portals and mobile applications that standardize the customer experience across fixed and mobile device platforms. These tools provide customers with a personalized, contextual experience for diagnosing and troubleshooting configuration and performance issues related to access networks, home LANs, devices, applications, and Wi-Fi.
Why are both customers and service providers adopting self-care so enthusiastically? From the customer’s perspective, self-service is valuable because it is convenient and flexible. It provides an “autonomous communications channel enabling customers to obtain ongoing support on an “anytime” basis”[1]. Users are able to address the issue from wherever they are using whatever channel is most convenient for them, whether it be a smartphone, a tablet, a laptop, the Internet, or within a website. This is being enabled by new technologies like WebRTC and VoLTE, which make it easy to strike up a conversation from anywhere. For CSPs, self-service not only reduces the cost of interaction with customers, but also allows them to collect more customer information to deliver a more personalized experience. This, in turn, drives higher customer retention, increases revenues, and positions their brand as being a provider of a comprehensive and personalized customer experience.
It is critical to implement these self-care initiatives without compromising customer satisfaction in return for the cost-savings associated with an automated self-service system. The self-service tools that are provided must be valuable to consumers in order for them to adopt them wholeheartedly. They must empower customers to transact how they want, when they want.
At Motive, self-service is something we have long been interested in. Our dynamic and innovative self-care products, like Motive’s Self-Service Console, empower CSPs to reduce support costs, accelerate problem resolution and exceed customer expectations. These tools also allow customers to pay their bills, access their accounts and schedule maintenance, all without having to involve an intermediary. After making Motive’s self care options available to a large European operator, 88% of customers that used its PC-based troubleshooting application were able to avoid a call to the help desk altogether.
Due to the increasing amount of human-computer interaction in our world today, many people are much more comfortable accessing an account via a self-service portal. Customers feel empowered when they are able to avoid bypass the middleman and just resolve their problems themselves. On the flip side, CSPs are able to cut costs, get a better view of their customers, and provide more personalized service. That’s a win-win if I’ve ever seen one.
[1] Gupta, B., Johnson, R., & Pramidi, S. (2005). The Challenge of Customer Self-Service in Telecom. Infosys.
Why I don’t use Skype much largely is the result of a savvy move from a telecom provider in Southeast Asia.
I have many friends in Asia, many of whom are not exactly rolling in money. So they can’t afford a data plan on their cell phone to use Skype. But what they all can do is use Facebook, and they all can use Facebook because many telecoms in the region give Facebook access away for free while charging for other Internet access such as web browsing. This is a good way to slowly upsell consumers—and to indirectly get me to use Facebook even more than I normally would.
Similar value-added services through selective access to particular mobile applications can be seen here in the U.S., too. T-Mobile, for instance, has recently begun offering unlimited streaming Internet radio even for customers who can’t step up for the larger data plans that normally would be needed to support Internet radio on a mobile device.
This is good business. It is a way that operators can help fend off the over-the-top challenge that threatens to turn telecoms into commodity businesses.
“To be innovative, service providers are finding ways to tailor their services and associated pricing to specific over-the-top application-driven consumption patterns with value-added service models,” noted Steve Morin, director of product management for IP applications in Alcatel-Lucent’s IP routing and transport business line in a recent TechZine article, Monetize your over-the-top mobile applications. “Application based charging and control enables you to accurately monetize a new breed of personalized service plans that have both knowledge and context of the specific underlying applications.”
To be able to do this effectively, an operator must be able to parse traffic finely and have application-level identification and control functions embedded directly into the mobile gateway. But if it has this functionality in place, there are many potential avenues for monetization and differentiation.
Operators can create service packages based on social media, gaming, video or other logical groupings, for instance, and charge a monthly subscription fee for unlimited traffic around these interests. Or a provider could offer a monetary incentive based on what time of day the data was being used, noted Morin.
There are almost an infinite number of potential uses for this model, in fact. Operators just need to figure out how to use properly monetize this value-add opportunity now that mobile applications have quietly gotten customers away from thinking of Internet access as being one and the same no matter what application is using the data.
]]>The Economist has its famous Big Mac index for comparing buying power across countries. But I wanted an index that focuses on the cost of mobile data usage. That meant I had to find a data-charging equivalent of the Big Mac. I needed an item that crosses cultural boundaries, is universally understood and is available worldwide.
I considered many possibilities. But the answer arrived when I saw my daughter laughing at a video of a cat playing a piano. Obviously, the mobile data equivalent of the Big Mac is the YouTube video. It’s a universally available service that is easily measured in quantitative terms, making it ideal for comparing mobile data costs.
In honor of my daughter, I chose the classic “piano-playing cat” as the baseline video. And by the way, this cat video has been viewed over 34 million times, proving its suitability as a baseline.
How the index works
A typical YouTube video, delivered to a smartphone at high quality, requires about 2.3 Mb of data per minute. The piano-playing cat video is 55 seconds long, so it represents 2.1 Mb of data. Using that standard, I created the cat video index shown in Table 1. It compares the current worldwide costs of watching this cat video.
Table 1: How much it costs to watch the piano-playing cat (in US dollars)
As you can see, data costs vary widely around the world. The Danes pay the least to watch cat videos, despite their generally high cost of living. In Denmark, viewing the piano-playing cat 10 times costs only 4 cents. In the United States, you pay 31 cents for 10 views. And in the most expensive city, Seoul, the urge to watch this cute kitty costs you a whopping 41 cents for 10 views. That’s 9 times the cost in Denmark.
How can you use this index?
Your subscribers may be afraid of shocking surprises on their mobile data bill because they’re not really sure what a megabyte of data actually is — in terms of how they typically use their mobile devices. This index can help “translate” the costs of a typical service. That is, if video costs 4 cents for 10 minutes, then it is an affordable bit of fun.
With that in mind, the index can also be used as the basis for marketing campaigns, both positive and cautionary. In other words, this information can help you alleviate the fear of bill shock, as well as promote additional usage.
For more ideas on how you might use this down-to-earth view of data usage costs to promote data usage, take a look at Daisy Su’s blog “10 offers for driving mobile data growth,” as well as “Young Consumers Drive Mobile Data Growth.” You’ll learn more about driving monetization of the data network. These steps can include new ways to encourage groups of subscribers to use data to create a shared experience based on their interests. Or you might simply inspire a spur-of-the-moment viewing of a cat playing the piano.
Syntonic Wireless™ is bringing sponsored data to AT&T customers. The Seattle-based mobile services company’s new Syntonic Sponsored Content StoreSM, creates an open marketplace where AT&T’s iOS and Android customers can find and consume free or premium content without consuming their data plans. Integrated with AT&T’s Sponsored DataSM service, the Syntonic Sponsored Content Store operates on the third party pays concept, one of the six degrees of mobile data plan innovation.
When it announced Sponsored Data in January 2014, AT&T offered a vision for a service that would give sponsors new ways to engage with customers and employees. Sponsors could come from industries as diverse as healthcare, retail, media and entertainment, and financial services. They could use sponsored data in a variety of different ways, including:
These examples don’t require sponsors to buy large quantities of data. Videos would be a few minutes long at most, and would not necessarily require HD quality.
If sponsorship deals don’t enable most customers to reduce the amount of data they purchase — either because the amount of sponsored data is too small or the sponsored applications don’t merit frequent use — the service provider can treat the sponsor’s payments as incremental revenue. Prices can be lower than those offered to the consumer. In fact, sponsors may argue they deserve a discount for buying large volumes of data or committing to a minimum purchase while not receiving enhanced speeds. Service providers need to manage expectations around pricing for customers: Since customers’ wireless bills don’t shrink, some may accuse service providers of charging twice for the same data.
On the other hand, if some customers can use sponsored data to reduce their monthly data plan, service providers will need to keep sponsor pricing in line with what the average consumer pays for data. Otherwise providers risk delivering the same amount of data but getting less revenue for the sponsored portion, causing margins to decline. If sponsored data prices are not meaningfully discounted, use cases will continue on current trends and be relatively light on data consumption. Sponsoring data at normal consumer prices for a data-heavy application, like streaming video, will be costly.
Pricing aside, how can sponsored data offers be structured? While by no means a complete list, here are five possibilities that can provide benefits to service providers, sponsors and customers alike:
These scenarios illustrate a few of the many ways that sponsored data can be used to market new content and applications, drive subscription campaigns, help enterprises address some of the challenges of supporting BYOD policies, or even reduce cost. In scenarios where data sponsorship ends after a time limit or consumption threshold is reached, communication by both the service provider and content provider will be key to avoiding customer dissatisfaction.
The toll-free data market is still nascent. We will see innovative third-party pays use cases emerge as service providers and content providers partner on new offers across industries. AT&T’s Sponsored Data and Syntonic’s Sponsored Content Store are key steps in bringing third-party pays data plan innovations to the market.
What other ideas do you have on how sponsored data offerings can be structured? Please add your thoughts to the comments section below or share them with me on Twitter @rhcrowe.
Download the Six Degrees of Mobile Data Plan Innovation e-book. Please follow us on TMCnet, and click here to subscribe for more information and updates.
Past blogs in this series:
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The last Six Degrees blog explored consumer attitudes toward two different mobile share plan options: sharing data only and sharing voice, messaging and data. This blog will explore attitudes toward a 3rd option: sharing unlimited voice and messaging — but not data — across multiple devices or subscribers.
Of course, data is still in the mix. Subscribers who use a shared voice and messaging plan would have the option to purchase a separate data plan for their own devices. This sharing scenario is similar to the one offered by the Sprint FramilyTM plan, where each plan member has the option to choose a different monthly data limit.
Fast-growing Framily Sprint’s report for the quarter ending March 31, 2014 charts the rapid growth of the company’s Framily shared plan offer. Although the offer was introduced early in the quarter and only available in Sprint-branded stores, nearly 3 million customers had already signed up, making Framily the fastest-growing Sprint rate plan ever. An interesting dynamic of the Framily program is its ability to turn customers into recruiters for Sprint as they try to maximize their discount by getting more people to join their Framily. |
Market research by Alcatel-Lucent reveals that consumer interest in unlimited shared voice and messaging plans varies significantly from country to country (Figure 1). These plans appeal to a small percentage of respondents in the United Kingdom, United States and France. But interest is much higher in Brazil and Japan: Nearly one-fifth of Brazilian respondents and more a third of Japanese respondents say they are interested in unlimited shared voice and messaging plans. Interestingly, those who indicate a preference for sharing unlimited voice and messaging – including those from Brazil and Japan – aren’t demographically different from those who prefer to share data only or share everything.
The Alcatel-Lucent survey also shows that those interested in unlimited shared voice and text plans are likely to purchase these plans. Among interested respondents, likelihood to purchase ranges from 64% (Japan) to 92% (Brazil). While overall interest in sharing voice and text is lower in France, the UK and the US, those who are interested are highly inclined to make the purchase, as shown in Figure 2. These findings carry on a theme that emerged in the previous blog in the Six Degrees series: consumers attracted by sharing plans are willing to take action to get what they want.
As with data and "everything” share plans, the availability of unlimited voice and messaging share plans has a formidable impact on customer churn and retention for interested consumers. Respondents in all 5 countries show a willingness to switch service providers to get their preferred form of mobile sharing or to stay with their current service provider to keep it.
Figure 3 shows the churn impact of unlimited voice and messaging share plans among those who express an interest in these plans. Willingness to switch is strong in all 5 of the surveyed countries. It is highest in Brazil (86%) and the US (78%), and lowest in France (39%).
Figure 4 shows the retention impact of unlimited shared voice and messaging plans in the 5 countries. In each case, more than half of all interested respondents indicate that these plans would have a strong or very strong influence on their willingness to stay with their current service provider. Shared voice and messaging plans exert the strongest pull in the US (91%), UK (90%) and Brazil (87%). The retention impact isn’t quite as strong in France (55%).
The survey results show two key ways in which service providers can benefit from offering shared unlimited voice and messaging plans. The first is that they can attract new subscribers from a defined segment of the market. The second is that they can create “stickiness” by giving existing customers the ability to attach multiple devices and subscribers to a single mobile plan.
The primary reason respondents give in favor of sharing only voice and messaging is that they anticipate a lower price. This response is especially common in Japan (87%) but was chosen by more than 70% of respondents in all countries. Saving time by managing a single bill is a secondary motivator in France, the UK and the US.
But why not share data as well? Consumers adding data to the mix could surely expect a lower price and a single, unified bill.
Conversations between Alcatel-Lucent and service providers have uncovered a few reasons why subscribers may not want data included in a share plan. For example, some account owners won’t want to take responsibility for ensuring that individual plan members don’t use too much data. Likewise, some plan members may not like the idea of ceding account control and having their data limits or
In markets with low-price mobile data, there is still interest in individual plans that allow subscribers to share data from a primary account with one or several of their own data devices. See the previous blog in the series for more on data-only sharing. |
usage managed by another subscriber.
Because of this, some of Alcatel-Lucent’s service provider customers indicate that they see data usage control as a source of increased tension among share plan members – often family members. Not sharing data relieves this tension even if voice and messaging are shared. In markets where competition has spurred service providers to offer low-price data plans, the barrier to enabling data use for multiple devices and subscribers is low, and data sharing offers limited value. However, sharing voice and messaging still has appeal for the discounts that are assumed to come with it.
The Alcatel-Lucent survey results make it clear that mobile subscribers who are interested in sharing –whether it’s voice and messaging, data or all of the above —know what they want and are willing to take action to get it. All of these sharing options are possible in a data-first business model. By flipping their business models and putting data first, service providers can give subscribers the sharing options they want. This freedom of choice will help increase customer satisfaction and retention and reduce churn.
Connect with the author on Twitter: @rhcrowe
Past blogs in this series:
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Last week, I talked about mobile operators are building an overall brand experience that engages young consumers because the youth segment is valuable — and do influence adult segments. In addition to creating a youth brand or a youthful brand, mobile operators must also consider how to craft specific offers that promote the “mobile data first” experience to drive mobile data growth through the youth market.
Here are the 10 ideas that can help craft the “mobile data first” offers using an online charging solution (OCS).
1. Try before you buy
There are often barriers in the way of a young person’s first purchase impulse. The same barriers also apply to buying and consuming mobile data. So help them get past these barriers with short-term promotions. For example, with a 100% discount on data for the first 3 months. Or offer 300MB for the price of 100MB, for the first 3 months. These offers can stimulate the data experience and encourage greater usage.
2. Mobile data as a reward
Young consumers spend money on brands they love. Spend in other areas detracts from an immersive mobile data experience and spending. Mobile Apps like Kickbit working with an OCS allows consumers to get more megabytes of data in exchange for doing things like taking quick surveys, trying free trials, shopping, and watching videos. These incentives help overcome financial barriers, deepen the data experience and remove dependency on Wi-Fi. Taking the concept further, sponsored data plans and toll-free data can also help encourage youth to surf on their mobile Internet, rather than Wi-Fi, if the offers apply to the contents they enjoy frequently.
3. My Tribe and social gamification
My Tribe, a twist on shared data plans, helps counteract churn by offering young consumers a variety of propositions, such as unlimited voice and text while on your network. It can also offer group discounts on mobile data. The bigger the tribe is (up to a designated number of the tribe), the bigger the savings the tribe members will share. This idea capitalizes on youth social groups to provide mobile data discounts and increase retention and acquisition. Solavei’s social media referral offers and Sprint’s Framliy offers started this with a total bill discount.
We all know youth today also love mobile gaming, especially multiplayer games. Mobile operators can go further leveraging the gamification concept to provide an instant discount or additional bonus allowance when the total tribal usage reaches over multi-level thresholds.
4. Subsidized or discounted subscription app and services for My Tribe
The youth market is constantly seeking the hottest and trending mobile apps and services with freemium and subscription services. Without much money left for mobile data after paying for the apps and services, they tend to enjoy them on Wi-Fi. For example, they love WhatsApp but there’s an annual subscription fee of USD $0.99 after the initial free year. Operators could offer group discounts to the My Tribe offers with mobile data by subsidizing or discounting WhatsApp annual fees.
For instance, a community of 6 to 10 people could share a $4.99 offer, with a minimum mobile data allowance, instead of each paying $0.99 for WhatsApp usage. Offers can include other subscription-based music apps or gaming apps. These sorts of offers encourage young people to join your network and bring their friends. They also build loyalty and discourage churn.
5. A choice of subsidized apps bundle
Some young people may want unlimited WhatsApp on mobile data, and others may want unlimited Facebook, Twitter, Instagram, and many more. Etisalat has launched unlimited social bundles for a day or a month to tailor to their youth market. Why not let young people select which apps they would like to use in discounted or free mode since they fall in and out of love with mobile apps quite frequently. For example, the enhanced offer could be for a maximum of 3 apps to be included in the social app bundle, chosen from a pre-curated pool. And the discount could be in the form of a bucket of data associated with those apps, either capped or unlimited. A good practice for the mobile operators is to understand the network and usage impacts of mobile apps before curating such a pool of apps.
6. 200MB free each month when purchasing a tablet
We know from research that the youth market loves using tablets and that the growth of media-rich traffic like video is partly driven by tablet usage. Offering an incentive to use tablets will push up data consumption. Tablets could be offered with a free monthly allowance of 200MB of mobile data. Today, T-Mobile USA is offering free 2G data for life with up to 200MB of free 4G LTE data each month for as long as customers own the tablets purchased from T-Mobile.
7. Device-based discount on mobile data
The youth market is very loyal to particular mobile device brands and models and will be attracted to networks that offer the models they like. Attract the youth market to your brand by bundling the leading mobile devices with a discounted data bundle offer. Alternatively, mobile tablets can be bundled with a promotional, discounted data plan per MB, rather than feature phones, to encourage young consumers to surf the Internet freely on mobile tablets in places where Wi-Fi isn’t readily available. This will also help with the uptake of mobile tablet sales.
8. IOU for mobile data
Often implemented in prepaid services, this IOU (I owe you) idea is to advance an allowance from the next payment cycle to help promote a positive user experience. When users reach their data cap, their session simply stops until a top-up is made. The top-up takes time so the youth loses the opportunity to finish their data session, giving a poor user experience. To improve this situation, the youth could receive a flash screen message offering a nominal amount of mobile data, the cost of which will be deducted from their next top-up or next month’s payment.
9. Emergency bandwidth for a week
Often, young data users wait and move into Wi-Fi coverage to continue surfing on the Internet when they run out of mobile data. For existing customers, a cheap, emergency week-long pass for mobile data can be sold to tide the user over when a data bundle expires. It gives the youth market the option to buy either cheap, unlimited, low-bandwidth data or discounted, premium high-speed mobile data for a week. This lets them continue to use data for a nominal fee within their budget before the next bundle kicks in.
10. Bridge mobile data offer between Wi-Fi hotspots
The youth market is tribal and doesn’t have much money. They meet in groups in free Wi-Fi hotspots, consume data and then stop, until they reach the next free Wi-Fi location. Offer discounted data in selected mobile coverage areas like school campuses, shopping districts, concerts and stadiums as consumers move between Wi-Fi hotspots to allow them a continuous data experience — and get them used to consuming data on the mobile network.
What do you think? Do you like the 10 ideas? Have other ideas to share? Want to learn more about the Six Degrees of Mobile Data Plan Innovations and Mobile Application Ranking Report? Want to learn more about how Alcatel-Lucent can help? If you like this article, please feel free to share it with your followers.
]]>I’ve received a lot of questions from mobile operators, who are asking about mobile data growth and how it’s related to the youth market — meaning consumers from the age of 18 to 25 or sometimes 18 to 22. The mobile operators’ own research shows that the youth segment is valuable — and influences adult segments. The Business Case for Youth section of the Mobile Youth Report also says: “The youth market is worth $1 trillion dollars. Youth drive high-end smartphone markets. Youth have the highest lifetime value of all customers.” As a result, mobile operators around the world are taking notice of young consumers, and some are investing in a new youth brand to attract that segment.
For example, in Ireland, “48” is the new wave of youth mobile services targeting the 48-month duration between the ages of 18 and 22. See how 48 cleverly branded its video campaigns. It’s not about subscriptions, but about low-cost membership in the 48 community. Its members can get calling, texting, and mobile Internet services with a manageable cost — and find online support through FAQs, community support, and a 48 customer care agent offering online help with a 24-hour response time. On top of all that, 48 is encouraging members to grow their community by giving “Kickback” to members and their friends who join.
On the other hand, the Mobile Youth Report also points out under Youth Branding: “You don’t have to be a Youth Brand. Most popular brands with youth are Youthful not Youth brands (e.g. Starbucks, Apple, Facebook). Youthful means open to ideas and dialogue. The Next Big Thing always starts in the youth market and spreads to the mass market/adults later e.g. SMS, mobile messaging, Facebook, Instagram.”
Clearly, the recent “un-carrier” events launched at T-Mobile USA are working to attract youth through the CEO’s twitter account and the company’s Facebook and Instagram campaigns on “Break-up Letter” and “Rebel Maker.” These communications are getting a lot of notice by the youth segment.
Whether creating a youth brand or a youthful brand, mobile operators need to consider how to craft offers that promote the “mobile data first” experience. Young people don’t usually have a lot of money, but they are highly motivated to use data on the go, especially in countries where public Wi-Fi is readily available. The goal for 3G/4G LTE mobile operators is to drive the “mobile data first” experience into young consumers’ behaviors, so they will stop being afraid to use mobile data and feel in control of what they use and when they use it.
What other successful examples of youth brands vs. youthful brands do you know about? Do you agree that the youth segment influences adult segments in mobile data growth? Why or why not?
If you like this article, please feel free to share it with your followers. Next week, I will offer my insights on the 10 ways to drive mobile data growth through the youth market.
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“Multi-device Shared Plans are starting to gain traction in the market as they now represent 8.3% of tariff plans, growing 38% QoQ.” |
It’s not surprising to find a high level of interest in shared data plans among US consumers. Major US operators are leading the push for shared data plans, and Verizon Wireless launched its Share Everything plan nearly 2 years ago.
But shared data doesn’t just appeal to US mobile consumers. A sizable segment of the market in all of the surveyed countries is interested in sharing data. More importantly for mobile operators, this segment is willing to act to get its data plan of choice.
For example, respondents who express an interest in a shared data plan are highly likely to purchase one (Figure 1). In Brazil, 97% of these respondents say they are likely or very likely to buy a shared data plan. Likelihood to purchase is also high among interested respondents in the US (85%), UK (80%) and France (80%).
Respondents in Japan are the least inclined take the shared data plunge. Even so, 56% of those interested in sharing data say they would likely or very likely purchase a shared data plan. The very high probability of purchase in Brazil could be influenced by the fact that the survey reached a larger-than-average percentage of households with either 3 or more members (69%) or 3 or more devices (78%).
Those interested in sharing data are also willing to switch mobile operators to get this capability. Respondents in Brazil show the strongest willingness to change operators, with 97% of those interested in shared data indicating that they would definitely or likely make a switch to get a shared data plan. Interested respondents in the UK are also very open to change: 73% would change operators to get shared data. Figure 2 breaks down the churn impact of shared data plans across the 5 surveyed countries.
Shared data plans can play a strong role in subscriber retention, too. Results from all countries indicate that those interested in shared data are willing to stay with their current operator to keep it. The retention impact is highest in the US and Brazil, where 91% of those interested in shared data say that it plays a strong or very strong role in keeping them on board. Japanese consumers are less likely to stay with their current operators to keep shared data, but its retention impact (65% strong or very strong) is still formidable. Figure 3 summarizes the retention impact of shared data plans across the 5 surveyed countries.
What do all these interest, purchase likelihood, churn and retention numbers tell us? That this segment of the market knows what it wants and is willing to take action to get it!
And what’s behind the numbers? Respondents cite anticipated cost savings and efficient use of data across mobile devices as their major reasons for favoring share plans. Many also see shared data plans as a means to minimize “slippage” – data that is paid for each month but that goes unused. Those not interested in shared data plans primarily want to keep an existing unlimited data plan or have few mobile devices or users with which to share the data. They also anticipate that shared data plans will come with a cost increase.
Respondents interested in data sharing generally have a higher monthly mobile spend and a larger data allowance. Those who have purchased a Wi-Fi tethering plan from their mobile operator are also favorably inclined toward shared data plans. Finally, the number of people and mobile devices in the household influences interest in and willingness to adopt shared data plans. A minimum of 3 people or devices is the threshold at which consumers become interested in sharing data.
The Alcatel-Lucent research confirms that there is broad consumer interest in shared data plans. It also confirms that those interested in shared data are likely to take action to get it. Shared data is a tool that every mobile network can use to attract and retain customers.
Connect with the author, Rich Crowe, on Twitter: @rhcrowe.
Download the Six Degrees of Mobile Data Plan Innovation e-book. Please follow us on TMCnet, and click here to subscribe for more information and updates.
Past blogs in this series:
[1] Subscriber base size from “Service Provider Capex, Opex, Revenue, and Subscribers Database Quarterly Worldwide and Regional Database.” Infonetics Research, updated April 7, 2014.
This blog launches our three-part series focused on the value of VoLTE. My next two blogs will look at how VoLTE benefits your enterprise and consumer customers.
Generating higher revenues
How does VoLTE help you earn more money? By opening up revenues in four ways.
1. You gain more capacity for data and voice, using existing spectrum.
A VoLTE network has up to 3 times more voice and data capacity than 3G UMTS — and up to 6 times more than 2G GSM — and that extra capacity helps you sell more data services. Nearly everybody understood that part. What most didn’t know is that VoLTE’s packet headers are smaller than unoptimized VoIP/LTE, so that more bandwidth is available for data services. For instance, in a cell with 200 VoLTE calls, 4.4 Mbps is freed up for data services. VoLTE also reduces the consumption of each cell’s control channels, so the cell can serve more users and increase throughput for non-voice data services.
2. VoLTE encourages your customers to use more data.
Forget about charging more for voice or RCS. Rather, VoLTE allows your enterprise and consumer customers to easily use 4G LTE data services by maximizing their time on LTE. This difference helps business employees stay connected and work at LTE speeds. For example, they can keep their existing laptop or tablet, tether it using WiFi or Bluetooth to their VoLTE smartphone, and talk & work anywhere, without the old desk phone’s limitations or ongoing operational costs. Consumers can multi-task, talking and browsing simultaneously. As a result, VoLTE fits perfectly into today’s demand for faster mobile broadband.
3. You can offer rich IP communications right now, including video calling and content sharing.
Video provides engagement and immediacy. It’s as easy to use as voice or messaging, so your customers can use it at the jai alai game or for closing on that sales call without the hassles or variable clarity of OTT video. Or those expensive enterprise room systems. And content sharing helps your customers use media (files, pictures, videos, location, etc.) just as simply and broadly as texting. Instead of heading over to email or DropBox, simply move the content within the call itself, whether it’s to your fishing buddy or to your conference call. And thanks to WebRTC, your customers can do this with anybody, not just other VoLTE subscribers.
4. VoLTE sets the stage for distinctive apps and services.
You can also develop a full portfolio of differentiated applications and services that give you a competitive edge. Our adjacent MWC demo showed just how easy it is, for you or your application partners, to build engaging new services using New Conversation APIs and WebRTC.
With Cloud Communications, these offerings help move your organization fully into a data-centric ecosystem. It supports a data-centric pricing strategy that lets you put the focus on data plans, reduce consumer churn with bundled communications and grow your enterprise business by helping companies cut the cord on legacy customer-premise systems.
The bottom line
What’s the result, when you add up all the business advantages of VoLTE? As the video highlights, you can make a strong case for moving fully to 4G LTE — and doing away with split-network operations and cumbersome services.
In my next two blogs, we’ll take a closer look at the advantages you can offer your consumer and enterprise customers. Your 4G communications service becomes the one that people use, when communication matters. Meanwhile, Jean Jones’ upcoming new blog series offers crucial tips for improving your VoLTE deployment, based on interviews with Alcatel-Lucent experts who have first-hand experience with major service implementations.
Click here to subscribe to our series and for more information on IMS, VoLTE and NFV. To join the discussion, connect with Ed on Twitter: @EdElkin1 and follow #VoLTE.
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